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Third Party Marketing Organization (TPMO) Requirements – Not just a Sales Department Responsibility

If it seems as though the Centers for Medicare and Medicaid Services (CMS) has increased its focus, oversight and scrutiny on the marketing practices of some agents and brokers for Medicare Advantage (MA) and Prescription Drug Plans (PDPs), you are correct. Over the past few years, CMS has expressed concern over the numerous complaints from beneficiaries regarding marketing practices of MA and PDPs on multiple occasions and has implemented additional requirements to help protect beneficiaries. These changes resulted in additional requirements placed on sponsors to ensure their sales and marketing practices are compliant with CMS requirements. With all of these additional changes, MA and PDP Plans need to ensure they have a coordinated approach and are closely aligned with their Sales teams to ensure compliance with the requirements.


To help address CMS’ concerns, the Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs (the “2023 Final Rule”) issued by CMS  established additional marketing and communication requirements for MA and PDPs.  CMS’ intent with these new requirements was to address complaints of inappropriate marketing received from beneficiaries and their caregivers.

In August 2022, Senator Ron Wyden, the Chairman of the United States Senate Committee on Finance, sent a letter to 15 state insurance commissioners and state health insurance assistance programs requesting information about deceptive marketing practices being conducted by MA plans and Part D sponsors, agents and brokers, and others. The results of his review were released in a recent US Senate Finance Committee Report that detailed deceptive marketing practices by MA plans and urged CMS to take action to protect Medicare beneficiaries.

On October 19, 2022, CMS released Frequently Asked Questions (“FAQs”) and a memo which outlined best practices for marketing activities during the 2023 Annual Election Period (“AEP”) which ran from October 15, 2022 to December 7, 2023, focusing on Third-Party Marketing Organizations (“TPMOs”).  CMS advised that it has conducted secret shopping calls and discovered that some agents were not complying with current CMS regulations and were unduly pressuring beneficiaries, as well as failing to provide accurate or adequate information to assist beneficiaries in making informed enrollment decisions. CMS advised that they will continue to closely monitor marketing activities during the 2023 open enrollment, including marketing that is misleading, confusing, or misrepresenting a benefit or product, and will take compliance action against plan sponsors for activities and materials that do not comply with CMS’ requirements.

Just last month, CMS released a Health Plan Management System (HPMS) memo defining the term marketing and clarifying the content component of the definition to include, “any material or activity includes or addresses plan benefits, benefits structure, premiums, or cost sharing; measuring or ranking standards; or rewards and incentives.”

What is a Third-Party Marketing Organization (TPMO)?

TPMOs are defined as organizations that are compensated to perform lead generation, marketing, sales, and enrollment related functions as a part of the chain of health plan enrollment, that is the steps taken by a beneficiary from becoming aware of a Medicare plan or plans to making an enrollment decision. TPMOs include independent agents, brokers and organizational entities or first tier, downstream or related entity (FDRs) and other businesses which provide services to customers including an MA or Part D plan or an MA or Part D plan’s FDRs. CMS advised that the definition of TPMOs is intentionally broad to ensure it includes entities that conduct marketing and/or enrollment activities that result in a beneficiary’s enrollment in a Medicare plan.

TPMO Requirements from the 2023 Final Rule

In the 2023 Final Rule (Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Program), CMS introduced several requirements for TPMOS that perform services for MA and PDP Plans. CMS explained that while TPMOs can serve a role to assist beneficiaries locate Medicare plans that best meet their needs, additional regulatory oversight is required to protect Medicare beneficiaries from potentially misleading activities and to ensure that Medicare Plans have appropriate oversight of their TPMO.

  1. Disclaimer: CMS codified requirements that require all TPMOs to utilize a standardized disclaimer advising callers that “We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact or 1-800-Medicare to get information on all of your options.”. MA and PDP Plans need to ensure that any TPMOs associated with their plan utilize this disclaimer in all interactions with beneficiaries, including within the first minute of telephone calls, having it displayed on their website and in print and television ads that meet the definition of marketing. The disclaimer requirement was revised in the 2024 Final Rule, which is outlined below.
  2. Oversight: CMS codified additional TPMO oversight requirements covering agent, broker and other third-party requirements, in addition to existing FDR oversight requirements, to ensure that the TPMOs adhere to any requirements that apply to MA or PDP plans. CMS stressed that it is the responsibility of the plan to have knowledge of how and where TPMOs obtain leads or enrollments. Plans and their FDRs are required to contractually require TPMOs to disclose any subcontracted relationships used for marketing, lead generation and enrollment, require sales and enrollment calls with beneficiaries to be recorded in their entirety, and to have TPMOs provide monthly reports to the MA and PDP plans of any violations of requirements that apply to the Plan and disciplinary actions associated with Medicare beneficiary interactions.
  3. Beneficiary Notifications: CMS also codified requirements for TPMOs to provide beneficiaries with notifications associated with lead generation activities. This requirement is in response to concern that beneficiaries are receiving outreach from sales agents and brokers based on previous contacts, which has the potential for abuse from some “bad actors” in the industry. To address this concern, Plans are required to ensure TPMOs conducting lead generating activities inform the beneficiary that their information will be provided to a licensed agent for future contact or that they are being transferred to a licensed agent who can process their enrollment.

TPMO Requirements from the 2024 Final Rule

On April 12, 2023, CMS issued the Contract Year 2024 Policy and Technical Changes which includes a range of topics that have received recent scrutiny, including Plan oversight and marketing. The 2024 Final Rule includes more than twenty changes to the MA and Part D marketing regulations due to an increase in beneficiary complaints over the past several years, as well as the requirement for MA and part D sponsors to have TPMO monitoring and oversight plans. All changes in the 2024 Final Rule related to marketing and communications are applicable for 2024 marketing and communications beginning September 30, 2023. The changes that CMS outlined include several that are related to TPMOs, as follows:

  1. Plan Requirement to have a Monitoring and Oversight Plan and Report Non-Compliance to CMS: Based on its review of beneficiary complaints and audio calls between agents and beneficiaries, CMS is concerned about the level of oversight MA and Part D sponsors have over agents and brokers and has determined that plans appear to be reactive in addressing inappropriate agent and broker behavior. To address these concerns, even though CMS already requires plans to conduct oversight of FDRs, CMS is specifically requiring plans to develop and implement agent and broker monitoring and oversight plans and to report those agents and brokers that are found to be non-compliant to CMS. CMS also indicated that sponsors must be able to provide their plans to CMS, if requested.CMS has clarified that at a minimum, a proper oversight program would include reviewing internal grievances and CTMs, reviewing a random sampling of past audio sales, marketing and enrollment calls, listening to sales, marketing and enrollment calls in real time, and secretly shopping both in-person and web-based education and sales events. If sponsors identify agent or broker non-compliance, they are required to report that non-compliance to CMS starting on September 30, 2023. CMS does not expect sponsors to report minor issues and provided examples of reportable offenses such as an agent that continually fails to address elements, especially after being notified of the issues or if the agent’s conduct could cause potentially beneficiary impact or harm. CMS will provide additional guidance and examples of reportable offenses in the Medicare communications and Marketing Guidelines in the future.
  2. Submission of Marketing Material into the Health Plan Management System (HPMS): CMS implemented a change that requires TPMOs that develop marketing materials for more than one MA/PDP Sponsor to submit the marketing materials directly to CMS for review and approval, but only after obtaining prior approval of each MA/PDP Sponsor for whom the materials were designed for.
  3. Changes to TPMO Disclaimer: As noted above, as part of the 2023 Final Rule, CMS added a TPMO disclaimer that must be that conveyed within the first minute of a call, must be electronically conveyed when communicating via email or chat, must be prominently displayed on the TPMO’s website and must be included in all marketing materials. CMS has revised the existing disclaimer and has added a new disclaimer for TPMOs that represent all plans in a service area:
    1. TPMO does not represent all plans in the service area: The disclaimer has been updated to include the State Health insurance Program (SHIP) and the number of plans it represents: “We do not offer every plan available in your area. Currently we represent[insert number of organizations] organizations which offer [insert number of plans] products in your area.Please contact, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options.”
    2. TPMO represents all plans in the service area: CMS has added a new disclaimer that TPMOs who represent all plans in the service area must utilize: Currently we represent [insert number of organizations] organizations which offer [insert number of plans] products in your area. You can always contact, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) for help with plan choices.”
  4. Changes to Call Recording Requirements: CMS has revised the current requirement for TPMOs to record all calls with beneficiaries to require TPMOs to only record marketing, sales and enrollment calls. CMS determined that the current requirement was too broad because calls to set up in-person meetings, to confirm a beneficiary received plan welcome packets or calls where the beneficiary asked non-marketing questions (i.e.., effective date questions) were an unnecessary burden and were not aligned with the goal to ensure marketing, sales and enrollment activities meet the regulatory requirements. CMS also clarified that the audio portion of web-based calls, such as Zoom, Facetime or Skype, must be recorded and retained like traditional phone calls.
  5. Prohibition of the Use of the Medicare name and CMS Logo in a misleading way: Due to concerns over an increasing number of beneficiaries being misled into believe the entity they are contacting is Medicare or the Federal Government, CMS is specifically prohibiting the use of the Medicare name, CMS logo, products or information issued by the Federal Government, including the Medicare card, in a misleading manner. Plans Sponsor will be held accountable for any misleading information provided by their FDRS, including TPMOs.
  6. Prohibition of the use of Unsubstantiated Statements without Supporting Data: CMS further restricted the use of superlatives by prohibiting them unless substantiating supporting data is also referenced in the material. CMS is also requiring that the supporting data be current data that is about or from either the current or prior contract year.
  7. Prohibition on Advertising Benefits Not Available in the Plan’s Service Area: To reduce misleading marketing, CMS has specified that that MA and Part D plans may not engage in marketing that advertises benefits that are not available to beneficiaries in the service area where the marketing appears, unless it is unavoidable in a local market.
  8. Prohibition on Marketing Unless the Name of the MA Organization or Part D Sponsor is Clearly Displayed: To help to avoid beneficiary confusion, CMS will now require that the Plan Name, or marketing name as identified in HPMS, be used on all marketing materials. By requiring plan names in all marketing materials, it will also help to streamline CMS’ oversight and review of marketing materials.
  9. Prohibition of Marketing of “Savings” Not Realized: CMS added new requirements that prohibit sponsors from including information about savings available that are based on a comparison of typical expenses borne by uninsured individuals, unpaid costs of dually eligible beneficiaries, or other unrealized costs of a Medicare beneficiary.
  10. Clarification of Door-to-Door Solicitation: CMS clarified that if a member requests additional information through a business reply card (BRD) or other means that allows the agent to reach to the beneficiary via telephone, email or direct mail, but does not permit the agent to contact the beneficiary in person at their home. CMS clarified that contacting a beneficiary at their home is considered unsolicited door-to-door contact unless an appointment was previously scheduled.
  11. Annual Opt-Out for Plan Business: CMS has required plans to offer members the ability to opt out of being contacted concerning plan business, which has usually been done during the enrollment process or shortly thereafter. However, CMS has expanded the requirement to require that plan provide members with written opt-out information on at least an annual basis.
  12. Prohibition of the Distribution of Scope of Appointment (SOA) at Educational Events – CMS has revised the requirements to prohibit the collection of SOAs and prohibit agents from setting up future marketing appointments at educational events. Agents are permitted to make Business Reply cards (BRCs) available at educational events should a beneficiary wish to receive future contact.
  13. Separation of Educational and Marketing Events: CMS now requires that marketing events cannot take place within 12 hours of an educational event at the same location to ensure that beneficiaries have time to consider all their questions and options before making any decisions about their health care and they are not pressured into attending a marketing event. CMS has defined the “same location” as the entire building or adjacent buildings.
  14. Separation of Scope of Appointment (SOA) and a Meeting with a Beneficiary: CMS revised current requirements to include at least 48 hours between the completion of a SOA and a meeting with a beneficiary, with two exceptions noted. If a beneficiary is within four days of the end of a valid enrollment period (AEP, OEP, SEP or ICEP) or if a beneficiary initiates an in-person meeting with an agent, the 48 hour requirement is waived.
  15. Expiration Date on Scope of Appointment (SOA) and Business Reply Cards (BRCs):   CMS believes that SOAs, BRCs, and other contact cards should not be open-ended and has adopted a 12-month time limit on how long these materials may be used to contact a beneficiary to protect beneficiaries from unwanted or unsolicited contact in the future.
  16. Pre-Enrollment Checklist (PECL): CMS’ review of beneficiary complaints showed that many times beneficiaries were not aware that their current coverage would end once they enrolled in an MA Plan. To help address this concern, CMS has modified the PECL to add the “effect on current coverage” to the list of items that must be provided to the beneficiary to help ensure they understand the implications of enrollment in a MA or Part D plan. Additionally, the PECL must be revised with prospective enrollees as part of the telephonic enrollment process. CMS has left the decisions as to whether Plans would require TPMOs to read the PECL in its entirety or to require that each item on the PECL be discussed. CMS expects that agents ensure the beneficiary understands the items in the PECLs, which they may confirm by asking the enrollee if they understand the information provided or if they have any questions.

Plan Actions

In addition to the TPMO requirements that were implemented in the 2023 Final Rule, Plans also need to implement the additional oversight and other TMO and marketing requirements from the 2024 Final Rule by September 30, 2023. With all of these additional changes, sponsors need a coordinated process to ensure processes are developed and implemented both internally and with their TPMOs by the CMS required due date. However, with all of the changes, where should you start?

  1. Identify TPMOs Associated with your Organization – Before you can implement and ensure your organization’s TPMOs are compliant with CMS requirements, you first need a current list of the TPMOs that your organization is contracted with. If you already have a list of TPMOs, it is suggested that you confirm the list is current and identify if any additional TPMOs will be added for the 2024 marketing season starting on October 1st. The list should contain all of the TPMOs, including FMOs, agents and brokers, and any downstream entities they are contracted with related to your plan.
  2. Validate Contractual Requirements – As outlined in the 2023 Final Rule, Sponsors were required to include CMS requirements in their contracts or written agreements with TPMOs related to the disclosure of subcontracted relationship for marketing, lead generation and enrollment, requiring sales calls with beneficiaries to be recorded in their entity, requiring TPMOs to report staff disciplinary actions to sponsors on a monthly basis and requiring the use of the TPMO disclosure. Due to the 2024 Final Rule revisions, sponsors will need to update their TPMO contract language to add the additional disclaimer requirement and indicate that all marketing, sales and enrollment calls, including the audio portion of calls via web-based technology, be recorded in their entity. If your organization has not yet updated your TPMO contract language, this is an opportunity to add all of the 2023 and 2024 Final Rule requirements.
  3. Ensure TPMOs Receive Training on Updated Requirements – Sponsors are responsible for ensuring any TPMOs that conduct marketing, sales or enrollment activities associated with their plan are aware of and compliant with all CMS requirements. As such, Sponsors should conduct training or otherwise ensure their TPMOs are aware of and have plans to implement the required changes by September 30, 2023. If TPMOs develop marketing materials that will be utilized by multiple plans and need to be submitted to CMS, it is suggested that review and approval processes be implemented to ensure materials are reviewed timely as the TPMO needs to secure approval from all Plans that the material is related to.
  4. Develop and Implement a Monitoring and Oversight Plan – Sponsors must thoroughly review their current oversight and monitoring practices of Agents and Brokers and ensure they meets CMS requirements and expectations outlined in the Final Rule. In addition to the standard oversight of FDRs to ensure completion of training and exclusion check requirements, sponsors now have an additional obligation to proactively monitor and oversee the activities of agents and brokers. CMS has provided minimum requirements for a proper oversight program, but it is recommended to include additional areas in the oversight plan to ensure that TPMOs are compliant with all requirements. By developing and implementing a comprehensive TPMO oversight plan, sponsors can help ensure compliance with CMS requirements and mitigate potential risks associated with non-compliance.

TPMO Oversight Plan

CMS Minimum Oversight Requirements:

  1. Review of Internal Grievances and CTMS – Any beneficiary complaints related to sales and marketing should be reviewed and tracked at the agent or broker level to identify trends.
  2. Review audio sales, marketing, and enrollment calls, both past audio and in real-time. Plans need to review both recorded and live sales, marketing and telephonic enrollment calls to ensure agents and brokers are addressing all requirements in the calls. Plans may focus on telephonic enrollment calls as they are easily identified on the enrollment applications that are received, but to be compliant with CMS’ expectations, sponsors need to also review both audio recordings and live sales and marketing calls.
  3. Secret Shopping in person and web-based education and sales events

Additional Monitoring Elements to help ensure compliance with regulatory requirements:

  1. Validate monthly receipt of disciplinary action reports from TPMOs and their downstream entities
  2. Ensure receipt of TPMOs delegated entity reports on a routine basis. It is suggested that the TPMOs be required to provide notice upon engagement of new downstream entities and that TPMOs provide a report of all subcontracted relationships to the sponsor monthly.
  3. Routinely review the marketing materials developed and distributed by TPMOs to validate accuracy, to validate that the sponsor has reviewed and approved and to validate the TPMO has submitted the material to CMS via HPMS.
  4. Review TPMO websites to validate plan information is accurate and disclaimers are appropriately displayed.
  5. Ensure that any material or activity that is distributed via any means (e.g., mailing, television, social media, etc.) that mentions any benefit will be considered marketing and must be submitted into HPMS beginning July 10, 2023.

Sponsors should determine what area of their organization is responsible for overseeing TPMOs and ensure it is adequately staffed. To identify trends and potential issues, sponsors should implement processes to track sales and marketing incidents at the agent, broker and FMO levels. This approach can help sponsors report issues to CMS, identify training needs, and pinpoint agents, brokers and FMOs that put the plan at risk of non-compliance with CMS regulations.

  1. Develop and Implement a Process for the Reporting of Sales and Marketing incidents to CMS: Starting September 30, 2023, Sponsors will be required to report sales and marketing non-compliance to CMS. However, as status previously, CMS does not want or expect sponsors to report minor issues. As such, sponsors will be required to review identified issues and make a determination as to which incidents meet the criteria for reporting to CMS.


Due to the concerns raised by CMS about TPMOs and the new requirement for sponsors to have specific Agent and Broker Oversight plans, there is the possibility that CMS may assess the effectiveness of a sponsor’s plan when issues are identified or during the Compliance Program Effectiveness (CPE) portion of CMS Program Audits. Therefore, it is crucial that sponsors have robust TPMO oversight programs and ensure their oversight activities and results are well documented and aligned with CMS requirements.

If your organization needs assistance with ensuring that your TPMOs are in compliance with the new CMS requirements, in developing and implementing a robust TPMO oversight plan or any other Medicare-related issue, please contact BluePeak for support.

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